Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, August 3, 2021

Billionaire Peter Thiel amasses $5bn tax-free nest egg in retirement account

Wealth taxBillionaire Peter Thiel, one of the founders of PayPal, "has used a retirement account designed to help ordinary Americans save for their golden years to amass a $5 [billion] tax-free nest egg. . ." 

Thiel, who is emphatically opposed to higher taxes, uses a Roth individual retirement account (IRA) to amass a tax-free fortune. In fact, many "ultra-rich Americans" have used the same strategy. 

In 2018 the average Roth IRA held $39,108. Roth IRAs, which were established in 1997 "to encourage middle-class Americans to save. . .for retirement," are tax free as long as they are not withdrawn before the account holder reaches 59.5 years. 

According to records obtained by ProPublica, Thiel placed 1.7 million shares of then-private PayPal into a Roth IRA in 1999, when annual contributions were capped at $2,000. 

In just one year, Thiel's Roth increased from $1,664 to $3.8 million. Thiel then used the proceeds from the Roth to make highly successful investments. 

Thiel is only one of many wealthy Americans to use a Roth in order stay safe from high taxes. 

See Dominic Rushe, Billionaire Peter Thiel amasses $5bn tax-free nest egg in retirement account, Yahoo Finance, June 24, 2021. 

Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.


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